Pakistan imposes federal excise duty on cigarette material

In a significant move to tackle tax evasion in the tobacco industry, Pakistan's government has decided to impose a federal excise duty (FED) on the primary material used in cigarette production. The country's authorized cigarette manufacturers and promoters have welcomed this decision, which aims to bring tax evaders into the formal tax system.

During the recent budget presentation in the National Assembly, Finance Minister Muhammad Aurangzeb proposed the implementation of an FED of Rs44,000 per kilogram on acetate tow, the essential component in the manufacturing of cigarette filters. This measure is expected to enhance transparency and accountability in the tobacco sector, ensuring that all stakeholders contribute their fair share of taxes.

The introduction of the FED on acetate tow signifies the government's commitment to curbing illicit practices and promoting tax compliance within the tobacco industry. By targeting the primary material used in cigarette filters, authorities aim to deter tax evasion and encourage lawful business operations among manufacturers and distributors.

The imposition of a federal excise duty on acetate tow marks a significant step towards strengthening Pakistan's tax system and fostering a culture of compliance in the tobacco sector. This initiative not only aims to generate additional revenue for the government but also seeks to create a level playing field for all stakeholders in the industry. By promoting transparency and accountability, Pakistan is taking proactive measures to combat tax evasion and ensure sustainable economic growth.